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Notice to Members 96-54

NASD Regulation Reminds Members of Reporting Obligations of MSRB Rules G-37 and G-38, and Announces Sanction Guidelines for Failure to Report Form G-37/G-38

NASD Regulation, Inc. (NASD RegulationSM) again reminds members of their reporting obligations under Municipal Securities Rulemaking Board (MSRB) Rules G-37 and G-38. Members are required to submit Form G-37/G-38 to the MSRB within 30 calendar days after the end of each calendar quarter if any one of the following occurred during the reporting period: reportable political contributions to issuer officials or payments to political parties were made; the dealer engaged in municipal securities business; or the dealer used consultants to obtain or retain municipal securities business (i.e., new or continuing relationships with consultants). Failure to timely report information required by Rules G-37 and G-38 and patterns of filing deficiencies could result in a monetary sanction, suspension, and/or bar. On July 18, 1996, the NASD Regulation National Business Conduct Committee (NBCC) approved Sanction Guidelines for G-37/G-38 reporting violations. These guidelines are effective immediately and are provided at the end of this Notice.